Correlation Between United Rentals and Thai Nakarin
Can any of the company-specific risk be diversified away by investing in both United Rentals and Thai Nakarin at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Rentals and Thai Nakarin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Thai Nakarin Hospital, you can compare the effects of market volatilities on United Rentals and Thai Nakarin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Rentals with a short position of Thai Nakarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Thai Nakarin.
Diversification Opportunities for United Rentals and Thai Nakarin
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Thai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Thai Nakarin Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nakarin Hospital and United Rentals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Rentals are associated (or correlated) with Thai Nakarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nakarin Hospital has no effect on the direction of United Rentals i.e., United Rentals and Thai Nakarin go up and down completely randomly.
Pair Corralation between United Rentals and Thai Nakarin
Considering the 90-day investment horizon United Rentals is expected to generate 3.42 times more return on investment than Thai Nakarin. However, United Rentals is 3.42 times more volatile than Thai Nakarin Hospital. It trades about 0.19 of its potential returns per unit of risk. Thai Nakarin Hospital is currently generating about 0.26 per unit of risk. If you would invest 78,451 in United Rentals on September 5, 2024 and sell it today you would earn a total of 8,373 from holding United Rentals or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Rentals vs. Thai Nakarin Hospital
Performance |
| Timeline |
| United Rentals |
| Thai Nakarin Hospital |
United Rentals and Thai Nakarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Thai Nakarin
The main advantage of trading using opposite United Rentals and Thai Nakarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Thai Nakarin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thai Nakarin will offset losses from the drop in Thai Nakarin's long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Thai Nakarin vs. Vibhavadi Medical Center | Thai Nakarin vs. Ladprao General Hospital | Thai Nakarin vs. Ekachai Medical Care | Thai Nakarin vs. Chularat Hospital Public |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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